Dec. 31, 2009 (Chinavestor) Looking at the overbought / oversold monitor this morning we have the following important developments: an unusually strong comeback by American Oriental Bioengineering (NYSE:AOB); a correction by Zhongpin (NASDAQ:HOGS); CNinsure Inc. (NASDAQ:CISG) is oversold and ready for a comeback; a comeback by GigaMedia Ltd. (NASDAQ:GIGM) suggesting a similar move is likely by Acorn International (NYSE:ATV); and a widening price gap between Perfect World Co. Ltd. (NASDAQ:PWRD) and Shanda Interactive (NASDAQ:SNDA).
American Oriental Bio (NYSE:AOB) had a very strong day yesterday with heavy volume, suggesting the rally hasn't been exhausted just yet. Part of the strength of this NYSE listed pharma company is rotation within the sector - since AOB missed out on earlier rally of China Sky One Medical (NASDAQ:CSKI), China Pharma Holdings (NASDAQ:CPHI), and Simcere Phara (NYSE:SCR).
Shanda Games (NASDAQ:GAME) and Changyou.com (NASDAQ:CYOU) made it to the end of the overbought screen - a sharp contrast to the performance of the Perfect World (NASDAQ:PWRD), this latter on the oversold screen at the end of this report.
See chart below for the rest of the China ADR universe from a technical point of view.
Most overbought China stock list
The sharp drop of Acorn International (NYSE:ATV) is captured by the oversold monitor. But just as importantly, the drop is similar to that of GigaMedia (NASDAQ:GIGM) or The9 Ltd. (NASDAQ:NCTY) according to the oversold monitor. This in turn suggests a comeback for ATV is highly likely in the first week of 2010...
CNinsure (NASDAQ:CISG) is the most oversold China ADR at the moment. It is important to keep in mind that oversold is not necessarily the same as being bullish. It merely infers that the security has fallen too far too fast and may be due for a reaction rally.
Most oversold China stock list